Judge denies Evergreen request on Barclays shares

Reuters
Published: November 6, 2008

By Emily Chasan
A U.S. judge on Wednesday denied a request from solar power panel maker Evergreen Solar Inc's that would have prevented British bank Barclays PLC from trading in 12.2 million shares of Evergreen stock.
In a hearing in U.S. bankruptcy court in Manhattan, Judge James Peck said he was "unconvinced" that Evergreen would be irreparably harmed without a temporary injunction that would have locked up the shares during litigation.
Emanuel Grillo, a lawyer for Evergreen, said at the hearing that Barclays acquired the shares improperly as part of its purchase of Lehman Brothers Holdings Inc's core U.S. brokerage business. Barclays is now the company's second-largest shareholder and Grillo said the lack of clarity about the status of the shares could prevent Evergreen from going to the markets to raise more money from the markets.
In the hearing, Evergreen Chief Financial Officer Michael El-Hillow testified that the company is a start-up and does not generate cash, but instead loses about $7 million (4.4 million pounds) to $10 million per month.

"We survive on our ability to access capital markets," El-Hillow said.
Evergreen filed a lawsuit last month, saying that 30.9 million shares of its stock had been loaned to Lehman in connection with a $375 million financing the investment bank ran for the company in July 2008. About 18 million of the shares had been sold into the markets by Lehman, and were not transferred to Barclays, Grillo said.
Peck said he did not believe Evergreen's concern about the Barclays shares would be the primary difficulty in raising money.
"The problems with obtaining financing in today's credit markets are manifest .... It is difficult for me to identify the parking of these particular shares at Barclays as a principal impediment to the successful identification and closing of alternative means to finance the company's operations."
(Reporting by Emily Chasan, editing by Richard Chang)